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“Since announcing the lifting of its North Field moratorium, Qatar has gradually scaled up its development plans,” said Giles Farrer, research director, global gas and LNG supply at international natural resources consultancy Wood Mackenzie, said.

“Its motivations for this latest move are likely to be informed by a number of considerations.

“Firstly, costs. With worldwide activity in the oil and gas industry still low, now is a good time in the cost cycle to invest in a new project.

"And there are likely to be economies of scale from developing a bigger project, particularly in light of the promising appraisal results at the North Field, mentioned by Qatar Petroleum in its announcement today. These economies of scale will make what is already the most competitive new LNG project worldwide even cheaper.”

Mr Farrer added: “Our estimate of capex for the three megatrains previously announced was around $24 billion, encompassing both the upstream and liquefaction components of the project. Qatar could probably add an additional train without significant additions to capex.

“However, making sure megaprojects are delivered on time and on budget will be a huge undertaking.”

“Another consideration is market share,” he said.

“Since Qatar announced its initial plan, the market environment has improved. Forecasts of future oil prices are higher and forecasts of future LNG demand have grown stronger, particularly in Europe and China. Having already taken the decision to compete for LNG market share, Qatar is doubling down, making sure that it will be fully able to benefit from LNG market upside.

“Further, one of Qatar’s major competitors for new supply development - US LNG - is currently engaged in a tariff war with China, the world’s largest growth market for LNG. Qatar could see this as an opportunity. It has recently signed a contract doubling the volumes that it will sell to PetroChina and is likely to be looking at further opportunities to supply the Chinese market.”

Mr Farrer said: “As we have previously noted, by front loading development of its huge hydrocarbon reserves now, Qatar is also responding to the growing pace of decarbonisation, which represent a threat to long-term demand for oil and gas.

“On top of this, Qatar is keen to further its growth ambitions outside of the country. Qatar Petroleum has publicly indicated it is in discussions with a range of players about the expansion. Qatar Petroleum’s chief executive Saad Sherida al-Kaabi previously called this a ‘beauty parade’.

“As part of those partnership discussions, we believe Qatar is expecting these companies to provide access to other discovered resource opportunities around the world. Another train could mean another partnership opportunity, furthering Qatar Petroleum’s international growth ambitions. We expect partner selection for the megaprojects to be completed sometime in summer 2019.”

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